09/09/2024
Written by: Ian Morley
Summary:
Equity markets saw a significant rebound following the release of strong US Retail Sales data for June, which showed a 1% increase, surpassing the expected 0.3% growth. Additionally, US jobless claims were lower than anticipated, coming in at 227,000 compared to the forecasted 235,000. Adding to the positive outlook, Walmart exceeded expectations, signalling stable consumer health in the US.
In the UK, Retail Sales figures released this morning aligned with predictions, showing a robust recovery with a 0.5% increase, up from the previous month’s decline of -0.9%. This data contributed to a broad strengthening of the pound (GBP). The GBP also received a boost from yesterday’s Q2 GDP report, which indicated a 0.6% increase, despite economic output remaining flat in June.
Our Perspective:
The recent Retail Sales data from both the UK and US demonstrate resilient consumer demand, which has surprised markets that were recently concerned about a potential sharp decline in global economic activity.
Interest rate markets have been highly volatile, but the stronger-than-expected data has led to a reduction in the likelihood of interest rate cuts for the remainder of the year.
Later today, the Michigan Consumer Sentiment index is set to be released at 3 pm, with expectations of a 0.5% increase from last month’s figures.